What does the particular BMW dealer have to do with this ? As several people have said, a repair like this has to be approved by BMW NA or they won't pay for it.

Dealership represents BMW, I thought? I bought the car there. The dealership should be on my side if it is a BMW NA issue and work for a positive resolution for their customer.

The initial response from the dealer was more the opposite. Along the lines of "oh, yeah, your car, that claim was denied, the bill is $6000, you can come pick up the quote, we don't really have any details, supposedly you hit something, we're not really sure, call your insurance."

So basically dealership says I need to pay $500 deductible + take an at-fault on my driving record + pay more in insurance + lose 10K in equity in the car due to a CarFax record.. I ask to see the supposed evidence of "accident damage" and I am shown normal wear and tear; techs uncomfortably stare at the ground when I ask "how could this small scratch possibly be related to a component nearly a foot away?" and "if I hit something, wouldn't there be a single scratch on the exhaust, which is several inches lower and takes up half the area of the rear end?"